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SAP Exec Issues Innovation Challenge

SAP executive Claus Heinrich said Wednesday that IT managers must focus on innovation and technology adoption. Enabling adaptive business processes will be key to enterprise software, he offered to attendees at Forrester Research's Executive Strategy Foru

BOSTON—SAP executive Claus Heinrich stressed the importance of innovation and embracing new technologies while speaking here at Forrester Research Inc.s Executive Strategy Forum on Wednesday.

Heinrich, a member of the Walldorf, Germany-based companys executive board, oversees development efforts for the mySAP Business Suite. He told attendees, mostly CIOs and IT managers, that the future of enterprise software is all about enabling adaptive business processes.

"Innovation is one of the key differentiators for the success of companies," Heinrich said, adding that successful firms differentiate themselves by how well and how fast they can adapt technology to suit their business processes.

But such innovation really isnt an option, he stressed.

"Its no longer a question of can I innovate in order to become best in class, now its a question of can I innovate in order to survive," Heinrich said.

The executive spoke of the real-time nature of business today and how business events can be accounted for right away, not having to wait until a nightly batch process is complete.

"You dont have to model real-world data anymore," Heinrich said. "The real world and the IT world are increasingly becoming one and the same."

Handling this data can be daunting, he cautioned, but enterprises need to take advantage of the opportunity.

"The velocity and complexity of information have increased dramatically," said Heinrich. "Its not a threat, its an opportunity...to better serve customers."

Heinrich spoke of SAPs own Enterprise Services Architecture, a technology platform thats open; links people, processes and information; supports new technologies more quickly and supports the flexible adoption of business process changes.

In a question and answer session after his presentation, Heinrich conceded that Americans were ahead of Europeans in adopting new technologies.

"Theres more of a just do it mentality in the U.S.," Heinrich said. "People here take more risks, both entrepreneurial risks and personal risks."

When asked about SAPs slow take-up of client-server and Web technologies in the past, Heinrich responded that the company was "spearheading" extended Internet initiatives and said customer requests dictate much of SAPs new technology initiatives.

One example Heinrich cited of how SAP was innovating was its planned support for radio frequency identification (RFID) tags.

He took exception to a statement made earlier in the conference that RFID tags, though costing just a penny apiece, would generate another 30 cents in data management costs for each transaction they were involved with.

"Were talking billions of transactions that RFID tags would be used in," he said. "If each transaction costs 30 cents to manage, no one will be able to afford it."

He also blanched at suggestions that Oracle Corp. executives reportedly said that their database technology couldnt yet handle RFID transaction management.

"Oracle thinks they can do everything through databases," Heinrich said. "We have another opinion. We know applications and we know what data generated from the applications you have to store and what you dont have to store.

"Its really less a database issue and more of an application issue."

Heinrich brushed aside questions about how a possible acquisition of PeopleSoft Inc. by Oracle would affect SAP.

"I think well just continue to focus on our technologies and our customers," he said. "Well have to do that in either case."

Lastly, Heinrich was asked how the technology world would look five years from now, once the extended Internet—where companies can share data with customers, suppliers and partners over the Internet—takes hold.

"I think youll see more shared services and companies focused more on their core competencies, what they do best," he said.

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